GBP/USD Price Forecast – GBP/USD Range Bound Post Announcement of US mid-Term Election Results

The GBP/USD is continuing to hold just above the 1.3100 key technical level after seeing impressive gains recently, fueled largely by Brexit optimism and fresh Dollar-selling following US mid-term elections. The Irish border issue remains unresolved, little progress has been seen on trade negotiations and terms of the UK remaining within the EU’s customs union post-Brexit, and the skeletons of any kind of a plan have yet to be seen, but London markets are remaining hopeful that a plan for the upcoming European divorce will see a satisfying resolution in time for the final Brexit date next March.  As of writing this article, GBP/USD pair is trading near flat at 1.3128 up by 0.02% on the day.

Brexit Optimism Keeps Sterling’s Bull Momentum Intact

As US Greenback gained momentum in broad market following announcement of final outcome of midterm election, the pair saw slight downward slide but has held a stable range bound price action near weekly highs. The impact on forex market following final announcement of election results was very low as market had already priced in the outcome with most analysts and investors having predicted well ahead of elections that the congress would likely hold a split control and such an outcome is going to be bearish for USD in long term as Trump administration is going to have hard time pushing through legislations and democratic party is expected to probe into Trump’s Russian ties which could greatly affect price action of US Greenback in broad market.

Investors have now shifted their focus back to Brexit and UK politics. According to Reuters sources, the UK and EU are hoping for a breakthrough by Friday, which would allow the two parties to provide an update by Friday and still hold a summit by the end of the month. In other words, high-level negotiations are continuing as the clock approaches midnight, but it remains to be seen whether a workable agreement can be reached in time. But GBP bulls remain in control over broad based Brexit optimism. In case of positive Brexit headlines, there is high chance for pair to breach resistance and move towards 1.33 handle. Little data of note is slated for the economic calendar for today resulting in GBP traders gearing up for the UK’s GDP reading, due tomorrow. Expected support and resistance for the pair are at 1.3100, 1.3040, 1.3000 and 1.3150, 1.3185, 1.3210 respectively.